The university’s draft budget is set to be considered by the university council today and shows its annual deficit is expected to grow from $25.3m this year to $28.9m next year.
The university’s debt, which includes both this and next year’s deficits as well as spending on buildings, was expected to grow to $203m.
Acting vice-chancellor Prof Helen Nicholson sent shockwaves through the campus in April when she announced significant cuts would be needed to fill a $60m hole.
Since then, 107 staff had accepted voluntary redundancies and there have been job losses in several departments, including peace and conflict studies, geology, science communication, the languages programme and in the School of Computing.
The budget document says achieving a $28.9m deficit would be contingent on making $17.2m in savings —
$11m from academic divisions and the remaining $6.2m from service divisions.
University chief financial officer Brian Trott told the Otago Daily Times the university expected "savings to come from a variety of means, from staffing changes and paper/programme reviews to service provision changes, efficiency gains and revenue growth".
A further $20.3m in savings was expected to be needed in 2025.
The budget document indicated plans for job cuts next year had been scaled back.
"The university council has elected to absorb a higher deficit in 2024 to maintain a higher proportion of internal capability, in preparation for future [growth in student numbers]."
Mr Trott confirmed this.
"We are hopeful there will be fewer cuts than originally anticipated.
"This is in part because we forecast that in 2025 and 2026 there will be a recovery in student numbers and we need to ensure we have the resource and capability to provide services."
Enrolments at Otago were forecast to reach 18,913 equivalent fulltime students (EFTS) in 2024, a marginal increase on the 2023 expected result of 18,903 EFTS — which was about 5% lower than budgeted.
The document’s commentary painted a grim picture.
"In summary, the overall state of the New Zealand university sector is currently far from rosy," Mr Trott said.
"The university’s 2024 budget has been prepared during a period of continued major international and national disruption.
"While having its origins in the impacts of Covid-19 since 2020, this disruption is now overlaid by global geopolitical and climate instability, prevailing demographic, economic and labour market conditions, and — within Aotearoa New Zealand — reform of the vocational education sector."
The document also outlined the university’s desire for 20% of its student numbers to be from overseas by 2030; it said pre-pandemic levels of international students was likely to be achieved in 2025 or 2026.
Mr Trott told the ODT overall student numbers were expected to bounce back further in 2025.
"This enrolment increase is expected to come from a range of factors including the ongoing post-Covid recovery in international enrolments, a recovery in postgraduate enrolments and the positive pipeline impact of the demographic upswing in domestic school leaver numbers in 2025."
The university hoped for a financial turnaround in 2025, when it would "return to a positive operating surplus".
It said this would be contributed to by the achievement of "permanent financial savings targets".
Key figures for 2024 draft budget
Expected revenue: $841.4m
Expected expenditure: $870.3m
Expected deficit: $28.9m
Expected equivalent fulltime students: 18,913
